Macy’s Inc (NYSE: M) sold off on Thursday, trading 19 percent lower to the $25 handle.

The retailer warned that it would not meet its previous guidance for sales and earnings.

Based on its market cycles, the stock is likely to bounce, but we see it heading even lower in the intermediate term.

Macy’s Stock Weekly Chart

Macy’s warned that its net sales would be flat, compared to its previous estimate of 0.3-0.7 percent growth. The company also said its earnings would fall short of its previous guidance. This raised concerns for others in the sector, pushing the SDPR S&P Retail ETF (NYSE: XRT) lower by as much as 4 percent in the early morning.

CEO Jeff Gennette explained that, “The holiday season began strong, but then weakened and did not return to expected patterns until the week of Christmas.”

Our analysis of the market cycles for Macy’s suggests that it is at the tail end of the declining phase of its current minor cycle. Upon completion, we expect a bounce and then for the stock to head lower into early-April. Our target is around $22.